Siemens Business Communications to be Sold

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Siemens Business Communications to be Sold

Siemens has put its Enterprise Communications division up for sale and it seems potential acquirers are Alcatel-Lucent, Nortel Networks and hedge fund Cerberus Capital Management.

Alcatel-Lucent would be an interesting partner as Lucent spun off its enterprise division into Avaya about seven years ago and as I have said repeatedly, having an enterprise division allows a company to offset weak service provider sales and vice versa. The Siemens customer base would be a nice addition to the former Alcatel enterprise communications division and in theory this purchase would allow the Paris/New Jersey-based company to have a broader spectrum of customers to help contribute to its revenue.

Nortel Networks has been committed to the enterprise as well as service provider markets. Nortel is a strong technology company and so is Siemens. Both companies were early to work closely with Microsoft. This would be a nice market share grab for Nortel.

Cerberus Capital Management is more interesting as the company is strong in disparate industries but nothing in telecom. Cerberus is probably best known for its takeover of Chrysler and its hiring of Treasury Secretary John Snow.

Why telecom for Cerberus? Probably the best reason is plain old diversification.

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